With debts rising faster than new graduates’ starting salaries, a student debt crisis has the potential to haunt the nation much in the way the mortgage crisis did 10 years ago. In general, the roots of this problem lie, in part, in the private student loan, or PSL, market created by and in response to the Higher Education Act of 1965, or the HEA. The federal government’s commitment to funding post-secondary education spawned new lenders, borrowers and servicers, all operating within a regulatory regime administered by the U.S. Department of Education for more than 50 years. In the last decade, as borrowers assumed more unsustainable debts, federal actors, from the DOE to the Consumer Financial Protection Bureau, turned their attention to the behavior of private lenders and servicers of both federal and private loans. In this pursuit, federal authorities relied upon numerous consumer protection statutes and aligned themselves with many state-level agencies, including state attorneys general, from across the country.

Beginning in 2016, a new mood dampened the federal bureaucracy’s regulatory pace. The DOE, led by Secretary Elisabeth DeVos displayed decreased enthusiasm for regulation and litigation. Once John Michael “Mick” Mulvaney arrived at the CFPB, he brought a similar wariness for administrative and legal activism, one sure to be continued by any likely successor.

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